More Volt Math

The comments to my previous post, Some Volt Math, had some very astute observations.  Obviously my little calculation was based on lots of assumptions, and there are many ways to make the economics worse for the Volt.

For example, if you add the cost of a 240V home charger, professionally installed, it could add thousands to the cost.  On the other hand, it may be partly offset with tax credits.

Sales tax on the difference can be significant, 7% of $8,500 is $600, or 9 months of cost advantage gone.

12c/kWh electricity may be a rosy assumption for some, such as Californians.  What if you had to pay 15c/kWh, or in Hawaii, 27c/kWh?

On the plus side, the alternative to the Volt might not be a 30mpg vehicle, it could be a 25mpg vehicle.  But then again, it could cost $20,000 instead of $25,000, adding another $5,000 to the payoff barrier!

I have also read stories on forums that some Chevrolet dealers are planning on charging thousands over MSRP.  This won't last long, they are just going to make extra money on the early adopters, and will have to make deals when demand collapses at those prices.

I think I need to make a spreadsheet.

"Sponsored Post" WTF?

Over at LeftLane News, I read a glowing review of Toyota safety features.  I wondered why they were basically repeating Toyota's new marketing campaign, until I saw the tag "Sponsored Post".

Guys, write your own stuff.  It is bad enough that readers have to wade through banner ads, side panels, and on some sites, popup ads.  If they have to learn to ignore parts of your main feed, they'll get annoyed and start to tune out.

I don't have massive readership, but for the few readers I do have, I can promise this: any posts you read on here were written by me, with some thought.  There will be no sponsored posts.  No ghostwriting.  

Some Volt Math

Today's big news is that GM will charge $41,000 MSRP for the Volt. (Question for GM: how will you keep dealers from adding a "market adjustment"?)

Assume you can get the $7,500 tax rebate, so your actual price is $35,000, plus applicable local taxes. And suppose that a comparably equipped vehicle of similar size, in a non-hybrid flavor, can be had for $25,000 (a premium compact like a VW Jetta, Volvo C30, or a Subaru Impreza).

For $8,500 premium, you get a 40mile all electric range. That represents 80% of the 16KWh battery, or about 13kWh. At 12c/kWh, if you can drive all electric, 15,000mi/year will cost you about $585. Very nice.

If your premium compact gas car gets an average of just 30mpg, 15,000mi at $3.00/gal will cost you $1,500.

Under these assumptions, best case (all electric Volt miles), you save $915/year driving the Volt. To gain back your $10,000 price premium, you will have to drive the Volt for 9.3 years, 1.3 year longer than the battery warranty.

Now suppose you can't run your Volt 100% electric, but you need to rely on the gas generator engine for just 33% of your mileage. 10,000 miles electric will cost you $390, and 5,000 miles at 40mpg (assume) will cost you $375. Running a Volt 66/33 electric/gas will cost you $765. The payback time for your $10,000 premium is now over 11.1 years, 3 years longer than the battery warranty.

My point here is that at $41,000 MSRP, the Volt is not a great deal, except for people who are passionate about not using much gasoline. In order to even come close to making sense for the average consumer, the Volt needs to be priced for a payback of about 5 years, or about $29,000 out-the-door, or $36,500 MSRP, with the $7,500 tax credit.

Update: fixed my math error.

2011 Explorer Reveal

So yesterday was National Explorer Reveal Day.  I won't re-write what you have no doubt already read from many other source.

Here is a nice slide show of the reveal in Dearborn, from the Examiner.  Apparently, worried that people would get the idea that the new Explorer is an on-road machine only, Ford constructed a 30 foot high dirt hill (very well groomed) which they used to unveil the new Explorer.  

I think the vehicle looks great, inside and out, but it is a definite departure for Ford.  It is no longer PC to sell a truck which over-capable, primarily targeted at suburban families, who won't really ever drive it on off-road trails or tow anything heavier than a jet-ski trailer or pop up camper.   Ford looked at who was buying the old Explorer, and made a vehicle that appeals to a majority of those customers.  This will however alienate the few people who actually used the old Explorer as a heavy tow vehicle, or benefited from a real locking 4x4 system.   

2011 Ford Explorer Aside

Old Henry was not known as being particularly friendly to the Jews.

Today, Ford is showing off a major redesign of one it its signature products, the Explorer.

In this video, project manager Julie Levine shows Mark Fields some of the new features of the 2011 Explorer.

They're both Jewish.  

Ford's Explorer Tease Campaign

Ford is running a teaser campaign on Facebook for its new unibody Explorer.  You can see spy shots here.  I have been following it to see the teasers.  The official reveal will be Monday.  Since they met their goal of 30,000 friends, they will be giving away a new Explorer.

I am amazed at all the people who say basically "if it isn't a truck, I don't want it!"  The days of the body on frame, rear wheel drive, V8 powered SUV are long over.  All the big players have basically left the market except for Toyota, which sells the 4Runner, and of course Jeep.   Oh, and you can't get a V8 4runner.  And Xterra doesn't have 3 rows. GM's Trailblazer and Hummer H3?  Dead.  Even the Jeep Commander, which was unibody, is rumored to be going out of production.

From Edmund's, here is the list of top 5 selling mid-sized SUVs:

2010 Ford Edge

2010 Toyota RAV4

2010 Chevrolet Traverse

2010 Jeep Wrangler

2011 Honda Pilot

Only the Wrangler is a body on frame rear driver.

Aside from niche vehicles like the Wrangler, Xterra, and FJ Cruiser, the mass market is moving towards lighter, more fuel efficient "crossover" type SUVs.  People want a little bit of offroad capability, but they also want good fuel economy and handling.  The sweet spot here is clearly mid-sized unibody designs like the Chevrolet Traverse.  

Hurray! BP stops leak!

Finally, BP has been able to stop the oil leak.