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Bernard Hickey test drives a plug-in hybrid electric SUV and finds even a new one almost makes economic sense. A 2nd hand one definitely would

Bernard Hickey test drives a plug-in hybrid electric SUV and finds even a new one almost makes economic sense. A 2nd hand one definitely would

By Bernard Hickey

Surely, I've wondered, New Zealand could use all its water and wind and steam to power a big, comfortable and useful car without pumping more carbon dioxide into our warming atmosphere.

Up until now it's been much easier to dream about than do.

Purely electric cars have been prohibitively expensive to buy and the business of recharging purely electric cars has been risky and financially mysterious.

It seemed a fringe thing you did because it made you feel good, rather than made much practical or financial sense. Hybrids such as the Toyota Prius have become more popular, but more so with taxi drivers doing many tens of thousands of kilometres a year. Such non-plug in hybrids still use petrol, but the savings are worth it when you're doing many taxi-like kilometres.

So this has meant that hybrid and electric-only cars such as the Nissan Leaf have not taken off among the general population as some might have hoped.

That may be about to change because of better battery technology, the high New Zealand dollar and a new way to buy power.

Just before Christmas I test drove a Mitsubishi Outlander PHEV (Plug In Hybrid Electric Vehicle) for almost two weeks around Wellington and thought for the first time that my day dreams are nearer to truth than fiction.

The Outlander PHEV is unique in that it is a full size SUV with a big enough and efficient enough battery to run purely on electric power for enough distance for your daily commute. But it also has a 2 litre petrol engine that kicks in if you run out of electric power on a long trip or when you're accelerating up the steepest hills with a heavy load. Unlike a 'normal' hybrid, the petrol engine hardly ever runs in usual commute and you plug it in to your mains power to recharge it overnight.

It means you can relax about a long trip or running out of electricity, but you can also be confident you can use hardly any or no petrol during normal commuting.

I thought it was worth running the calculator over my real world experience to see if buying such a car stacked up financially because I'd always been a sceptic about the capital costs of electric-only and the petrol costs of conventional hybrids.

I also wanted to see if I could surmount one of the biggest hurdles to electric car ownership -- fear about the rising cost of electricity. Otherwise the risk is you would exchange one rising and painful cost from one set of energy oligopolists for another equally painful cost from another set of price gougers.

Our house in Brooklyn in Wellington is hooked up to Flick Electric Co. It's a new 'virtual' electricity retailer that buys power on the wholesale market and then sells it to householders at the wholesale price plus a margin. That contrasts with the big power 'gentailers' such as Contact or Meridian or Genesis, that set opaque prices that are disconnected from wholesale prices.

Using Flick means we can be sure that when Tiwai Point closes down we will get some of the expected 10% fall in wholesale prices, and also benefit if wholesale prices stagnate as they have in recent years because of flat to falling demand and rising supply. So far we've saved 10% on our power bills.

I also hoped to take advantage of a quirk of New Zealand's geography and the timing of how power is consumed. Our hydro-electric lakes are shallow, which means that when it rains a lot they have to be spilled, often at night. That's because most people use most power in the mornings and early evenings. We use hardly any power in the dead of night, so the power price is lowest in the dead of night when demand is low and there's plenty of water to be 'wasted'. Flick offers a 'night' rate that we could take advantage of.

I wanted to use that quirk to get hold of the cheap power in the dead of night to charge the Outlander. Over 15 days in December I drove the car 357 kilometres and recharged it in the evenings and overnight on 13 of those days. I used 118.4 kw/h of power at a cost of NZ$14.29.

The engine kicked in a few times going up the Brooklyn Hill and a few times on longer trips. I ended up using NZ$11.37 worth of petrol or about 1.6 litres per hundred kilometres. In total that works out at a total fuel (power plus petrol) cost of about 7.2 cents per kilometre. A petrol-only Outlander would have cost about 18 cents per kilometre in petrol.

I worked out that over a year of driving 20,000 kilometres I would save around NZ$2,180 a year in fuel by using the PHEV instead of a regular Outlander. That's about enough to compensate for the extra NZ$15,000 in capital costs for a PHEV Outlander (NZ$59,990) over a petrol-only Outlander (NZ$44,990).

Given the depreciation rates and interest costs on that extra NZ$15,000 of capital, I estimate the car would pay for itself (just) over a seven year period. That's much better than the capital and running costs of new pure electric and conventional hybrids, but it's still not a slam dunk.

It's certainly more attractive than I thought, but my ultimate carbon zero daydream is to avoid the depreciation and capital costs altogether by buying this type of hybrid second hand in a few years when the bulk of the depreciation has happened. That way I can avoid breaking my big personal finance rule: never borrow money to buy a car, never buy a new car and absolutely never borrow money to buy a new car.

These PHEVs will make an awful lot of economic sense as three or four year old second hand vehicles.


A version of this article was first published in the Herald on Sunday. It is here with permission.

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How much do the batteries cost and how long do they last?

Mitsubishi say it is a two hour job to replace the battery, which is currently priced at $16,000. The battery will slowly degrade. After 10 years it is predicted to be at 80% capacity, so it’s still fully functional in electric mode but you only get 80% of the driving range. It is too new to be certain however. The manufacturer says it should last "for the life of the vehicle".

personally I don't see the 80% as a problem, although it could be annoying.  Plenty of room for localised commuters who don't need more than 80% charge.  It's not like new cars keep 100% of their fuel efficiency anyway.

But that last sentence does concern me.  All that environmental effort by farmers, yet the urban market is moving to disposable cars !!

Thats an interesting point, and 16k is a lot cheaper, probably approaching 1/2 of the old battery costs.   last year there was a development that could drop that cost sunstantially as well.
The only data point I have seen is on the Prius which indicated the battery life was 7~10years, but US replacement cost was a lot lower than $16k. However the prius battey is smaller and US costs far lower and in the USA 3rd parties can replace it I think, even make it bigger.
'life of the vehicle" can mean 25 years, or does it mean the "economic life" which is more like 12 years? I dont think they say?   So if its 12 years what is the vehicle worth at that point? $3k? would you spend $16k on a new battery? I kind of suspect the depreciation could also be ugly. 

That is better then I thought, maybe our government and councils can buy these new, seeing as they are buying new cars all the time anyway.  Then BH can get his secondhand one in a few years.  The cynic in me questions the line that says 'it's to new to be certain'.  That stuff should be discovered during R&D, not aftermarket experimentation.

I have a friend who had to deliver one, it was a police case, he put the air-con on, big mistake.

Will be interesting to see how long the government wait before they come up with a way to tax these otherwise if they start to get popular the petrol tax take could drop considerably. 

They're already paying Road User Charges (RUC) & Reg & Warrant , like diesil fuel as diesil fuel doesn't have road taxes added to it.   Which is fine the vehicle is still using the public road - just need to hope that government and quangoes can keep their side of the costs down.

But it's also petrol powered so do you only pay ruc when you use electric? Or can you claim the petrol tax back? 

Check the RUC for "alternate fuel vehicles".  Same rules apply for LPG and CNG based hybrid (gas & petrol).  or for those using heated wood products, or even Carbide (but we haven't seen that scam for a while).

My suspicion is that you just have to wear the petrol tax cost for the hybrid privilege as there's not legislative description for how they can refund you.

RUC is more to do with damage of the roads? which is to do with weight? Otherwise you just wear the cost.
So ideally you want a EV only or a EV with deisel backup I assume.

I read recently that the government was not going to introduce road user charges on all electric vehicles until 2020.
Also i belive the new Kia being introduced into britain this year can do 300+ Km on a single charge and has some new facinating technology. As britain and nz cars are much the same the NZ dealers are trying to get them launched hear aswell.

The idea is, people switch. Bear in mind that road charges already are large to cover road costs, easy to put those up without limit almost.  I dont think we'll see switching en-mass, a) they cant be built that fast in the quantities needed, the batteries are clean room technology, ie expensive to manufacture.  b) they will be priced out of the range of many NZers, even the Leaf is $40k and their life 1/2 a petrol car.  So even 10 years from now I dont think there will be a significant % say 20% of EVs about, far more likely that many ppl will be using public transport.

HIJKLMNO instead
battery/storage does not cut it yet.

Top gear isnt exactly known for its lack of bias......
"we will have gone backwards" indeed, that is what they dont get that is how its going to go, if you consider that backwards rather than different.
Now the interesting hybrid would be one of these with batteries.  So day to day around town/commuting 100% EV and recharge over-night, extremely cheap to run no hydrogen needed/used.  Come the summer hols put in the hydrogen for the range, so cake and eat it. 

that's what she said ;)  Mojo can you get me a mains powered one...

an e vehicle needs be viable standing alone, not a prop to a mal-grouping of electricity generation and supply (regulated) assets 
so a virtual energy retailer using current industry supply approach/equations, taking a margin out of gaming a major's pricing schedule, hardly consumer empowerment.
- remembering the way our wholesale market works (next hr/12hr/5min) is not the only way, nothing wrong with a next day market...
that aside this would certainly blow the gentailer business model, no more gaming the wholesale market, as demand could bite back
and its a maojor
some markets with wind, have occasion of -ve wholesale prices (when its blowing and base load takes 18hrs+ to shut down).

Henry, have you watched this? 'The princes of the yen'  let me know if it sounds familiar.

Interesting documentary. 
NZ has an ex World Bank director for Reserve Bank Governor. And a PM from International FX background.  They are likely to be following an agenda which is more loyal to a globalism/US/International agenda than staying loyal to NZs best interests. 
So is the lending expansion / housing bubble in NZ intentional, leading to an intentional 'crisis'?  
How will China fit into all of this? As they are still fire walled from full international investment into China. 

worth a look yes, especially the view over time.
most can do whats happening, few can nail the why.

For $60k (or even $45k) you can buy a 5 year old V8 Bmw M3!  I know what I'd rather drive...
Fuel costs are irrelevant if you are purchasing a car at the $60k price point.  Even 20% depreciation plus 6% interest is going to cost you $15.5k in the first year!  What is the petrol cost?  At 9L/100km 20,000km = 1800L = $3500PA - not even a quarter of the depreciation and interest cost!
So unless the car cost is low and the annual mileage is high or you intend keeping it for an unrealistically long time (in which case you will spend a fortune on repairs if you are doing a high mileage), then it is unlikely you will benefit from buying a more efficient car.
It's like buying a BMW i8 or la Ferrari for the efficiency....

A few comments:
1/ Plug in hybrids have made non plug in hybrids obselete overnight. When new imporved batteries come out, existing electric cars will be obselete. Don't expect a good resale price for a hybrid....
2/ Flick, and Tiwai shutting down: If/ when tiwai shuts down, people can join Flick then. No need to do it yet...
3/ 20,000ks! That's heaps! Where do you drive every day?
4/ Hybrids are heavy vehicles. I've driven Prius's. They handle really badly! And with having a CVT there is absolutely no fun to be had on a nice twisty road.

3) Petrol cars are a thing of the past, fun yes they were, as the Tgear piece henry_T posted said you have a Prius to commute and save the petrol for a [historic] sporty to play in.
NB Agree on manual v anything else, manual every time.
1) Tend to agree, the very thing about plugin is its hugely cheaper to run. It makes no sense to me to throw away the savings.

Why Tesla's battery for your home should terrify utilities
The prospect of cheap solar panels combined with powerful batteries has been a source of significant anxiety in the utility sector. In 2013, the Edison Electric Institute, the trade group for investor-owned electric companies, issued a report warning that disruption was coming. "One can imagine a day when battery storage technology or micro turbines could allow customers to be electric grid independent," the report said, likening the speed of the coming transition to the one from landlines to cellphones 10 years ago. Suddenly regulated monopolies are finding themselves in competition with their own customers.

Except, in the USA the line charges are mostly (only 10~20%? not) built into the use charge.  In NZ we have a totally different model and that is good news I hope for us. Except the lines will need upgrading to back feed and the Q is who meets that cost?  if the costis spread across all users then that is a regressive tax on the poor who wont be able to afford solar panels while the "middle class" can.  Unless those "dumping" power into the grid get charged extra for their lines use, that will upset them, yet it will be user pays.

Tesla battery is only effective in some areas of the US.

Several States/suppliers have Time Of Day charging, so night time electricity is really cheap, but lunch time power with all the offices using lighting and factories and food suppliers going full speed, that day time power is very expensive.

Elon's battery lets them utilise storage technology to shift that load off peak times and into the cheaper night time.   It's not designed to be off grid at all.


New Battery tech coming,
I kind of suspect that EVs bought today will be worthless in 10years as the tech is advancing so fast. or the $16k for a battery today will be $8k when they need replacing, making it economic to keep the car to about 16 years old, very interesting stuff.

Sorry the battery technology is just not there yet, 10 years life ? probably not it will fail before then and no one is going to front the replacement cost.
Everyone is missing the point with electric, there will come a point when the SUV is dead and due to pure road congestion and fuel prices we are going to be forced into small composite Electric cars that weigh only 500-600Kg and we can remark the motorways and get 4 lanes where we currently have 3.
One or two seaters and the electric sports car will truly be phenominal with 0-100Km/hr times in the 4 to 5 second bracket.
The electric technology will have its day, the elctronics is already there, the battery technology and gearing up to recycle it is not.

until we get to Hong Kong, Singapore, Tokyo density no.  Trends point the other way.

I dont agree ,if you look at some more up to date research/keep abreast of what is going on.
a) battery life is from prius data typically 8 years, but this is old tech, ie only now are the mk1 Prius's needing a new battery, from memory its was $5k US a new pack.
b) the life isnt 10 years its 10years to 80% of the capacity left for new batteries.
c) Battery costs seem to be halving every 5 years. ie what was $32k is now $16k. I doubt this will continue but recent tech advances seem to indicate that a 4 fold gain is probable. So you will be able to go twice the distance for half the cost for the same weight.   Now at the 10 year mark to spend $8k on a new "engine" to get another 10+ years that starts to become not that crazy given the money saving.

Not correct I have yet to have a Litium battery last 10 years and some will have cells in that just fail early and stuff the whole pack. Just ask yourself how long did your last cellphone or laptop battery last ? yes they can be made to last 10 year, they have to be top quality and very expensive.
How long does the internal combustion engine last ? alot longer than that if you look after it, my Toyota is 25 years old and yet to have an engine rebuild with 232,000Km on the clock. Change the oil every 10,000Km and it lasts forever.
I'm not against the electric car, in fact with my background in electronics I'm all for it, problem is we keep building stupid big heavy cars because no one would buy a nice lightweight electric car in the fear you would get killed by the current 2 ton monsters which keep getting bigger.
At somepoint there is going to have to be a sudden massive shift to electric, its inevitable, fossil fuels are a finite resource and the sun, wind and hydro are the only sustainable resources on the planet thats a go with the current technology.

Well lets not go on you personal  experience with a mobile phone or cheap laptop designed to last 4 years shall we. 
eg a few years ago I actually bought 2 battery packs off TM for my laptop, one lasted 9months the other is still 100% 4+ years later (still gives my 90~100mins), so it very much seems to depend on quality, also proving be wary of personal experience.
To start with the data I have seen suggests the Prius batteries do indeed last 8+ years. So yes they are better quality than a handphone expected to last at most 5 years.  On top of that no a failed cell does not stuff the whole pack, I am pretty sure each cell has a curcuit on it that disconnects it from the rest if it has an issue.  
Toyotas guarantee by the way "Your Prius carries a 8~10-year, 100,000~150,000-mile warranty on the hybrid battery." so if it fails at 4, 6 or 8 years you get a new one from Toyota. Now by 150,000 miles the car is pretty well worn and questionable if its worth spending much on.
Battery replacement is, Retail price for a new hybrid battery is $2589; with labor, it should be less than $3500 total, though these are US prices. Now if my petrol use goes from $1400 a year to half that and that is not  un-reasonable the new battery is paid for in 5 years, 1/2 its life.
10,000kms and no it doesnt last forever, no more like 250k. My mazda is 19years old and 180,000kms and I just did the cambelt for a second time, annual oil change, its clearly getting a little sloppy. Ten years / 90,000 kms from now I expect I will have to do a total rebuild, not really worth it on a 25year old car.

Marginal generation in NZ is thermal and they are running 24/7 so any marginal 
demand adds to marginal generation.
Net effects of plug in hybrids is simply to increase emissions in our current system.
Sorry guys to spoil some wishful thinking  but that's the way it works.

Uh no I od not think you are correct, marginal only if charging at peak?  So if you charge overnight at lo or no demand that could be 100% hydro.   Also if you belong to Meridian who have 100% renewables then no (though its kind of a pool thing I admit).

Marginal generation might be thermal, but they have to keep the burners warm.
So it's not the end of the world, especially in sustainable zero emission systems, and distibuted generation is in the future (why anyone in a single or two story house has electric (or worse gas) hot water is just not future or environmentally friendly)

I always look for real data in these circumstances.  I talk to people who actually use hybrids.
Taxis (mostly Pious, a few Camry) have run north of 500K with an original set of batteries (replacement of the whole thing is around $4.5K, but the latest ones can point to the dud cells in the array, and these can be replaced individually).  So ordinary commutes will be just fine.
The real issue (which is why I do wonder at Mitsi's choice of the Outlander for this push) is that a core use of SUV's is recreational towing - boats, trailers, caravans.  And given that there's only a 2-litre donk, and a 750Kg (braked and unbraked) tow capacity, it just ain't gonna service this market at all.  Even the smallest 'van has a MPLM of around 1100Kg, and a 750Kg boat on trailer will be a 3m tinnie/25Hp outboard at best.
I do think that the Tiwai closure will have a massive effect on the EV market, that battery/storage technology will advance, and that small EV's ranging from fast bicycyles, through cargo bikes to small three and four wheelers will sweep the field for personal transportation.
But for the heavy lifting - trucking, ag, delivery of FMCG to yer local supermart, imports and exports - there's nothing like liquid fuels at the moment. 

The core use of SUVs is the school run. A job for which a hybrid is well suited.

Except you dont need a SUV hybrid or not for that.

Don't look for big retail savings ex a Tiwai closure.
Their line charges are going to be reallocated over the rest of the market and will be significant.

Uh? a decent percentage 15%? can be transmitted into the grid today if needbe, more than that and the line would need upgrading, no huge costs considering the likfe of the gain.
Wouldnt surprise me that inside 15 years this is so, maybe even 10.

what you need is a 5KW solar system, so during the day when you are not using the car, the charging will be free

provided you only drive at night... and during summer.  PV panels about 50% during winter (rule of thumb)

Well 'wifey" drops kids off at 9am, car sits there til 3pm when she picks them up, sits there til 630pm when the sun is all but gone.
Lets say you commute, so when you get to your carpark you plugin, your 5kw home array is dumping into the grid and your EV is being recharged from the grid, so net cost is transmission loss and middleman's profit.
You can size the panels for the expected need and sell the excess to the grid.  So maybe in winter your 5kw unit is only giving you 3.5kw, but you need 5kw, well Ok so install a 7kw unit, or accept you buy 1.5kw.

Two engines and a boot full of batteries doesn't make a very environmentally friendly car.

Incorrect, it isnt like you claim.
a) You have one small engine and a zero emission electric motor.
b) You can recycle the batteries.

The engine powers the regenerative generator, and runs at optimum speed.  
Charging happens even when idling, rather than just having the motor running to keep flywheel moving.  If there is no more storage then the engine shuts off.

EV's really come into their own in stop-start travel as the electric motor can cut off totally.

The battery weight isn't too much of an issue, as you're replacing the weight of an engine block it's attendant parts.   Also you need a certain amount of weight for wind resistance and handling purposes, if the vehicle is too light the each person added is a major handling problem (ie change) for momentum and acceleration.  It would also shift the weight higher up in the vehicle which can be a hazard for turning on open roads and places with poor or reverse camber.

A fully electric car also comes with much lower maintenance costs and longer service intervals. There are very few moving parts to propel the vehicle - just the electric motors. Compare to a conventional car with pistons, cambelts, valves, transmissions, gearboxes. Electric cars are also very gentle on brakes due to regenerative breaking. No air filters, oil filters, exhausts, turbos, sparkplugs.
Battery anxiety is a non-issue. Batteries tend not to fail but may degrade over time. A drop of 20% over 10 years in about right when properly managed by the onboard computer. Less if you are only doing short commuter journeys each day. There are many Priuses with over 300,000km on the clock in the US. There are a few stories of cars with over 800,000km on the original battery. Replacement batteries are getting cheaper all the time. You can also get a reconditioned or salvaged battery for your second hand car for a lot less than a new one and still expect this to give you another 10 years of motoring joy.
A second hand Nissan Leaf can be picked up now for around $20k and represents a good deal for cheap motoring.

Yep the motor industrry hates them. No oil to change, oil filters, plugs...etc. About all you do is change window wiper blades and brake pads every 20,000km. No $1000 for a compulsory cam belt change either.  I odnt know about mechanical failures but when a conventional gearbox or engine failure sets you back $3000 I cant see its looking much different.
I think my small petrol car costs me about $400 per annum to look after, that would be half that every 2 years I reckon.
So if a battery is $16k every ten years say.  I save $1000 on the cambelt, and probably $300 on the servicing = $4000 saved, so that battery really is $12k.  Then there is the petrol saved, a typical cost per annum is about $1400 in petrol? v $100~200 in electricity.  If indeed you can save $1000~1200 in petrol per annum then in ten years its break even time.
The painful bit is the upfront cost in terms of interest for the extra cost of the EV.   

We have had a PHEV for nine months and are very happy with it. I did the sums when we bought it with petrol higher than it is now and it was break-even in comparison with a non-hybrid Outlader which was $10,000 cheaper. The intangible benefits are no CO2 or noise and more power/torque.  It is heavier though and you lose a spare wheel and potentially a row of seats. Many power companies will offer a special deal on night rate but apparently our meter still has ripple control?
Regenerative braking is great, slowing down recharges the batteries. It really does change the way I drive, trying to be as smooth as possible. Regenerative braking is controlled by paddles, I feel as if I have made a mistake if I ever have to press the brake pedal.

Nice comparison between sport car and car audio. Normally we can’t imagine this. Good one. Your concept is really so innovative and unique. I had never read any thoughts regarding this. Sometime our perception becomes totally different from others which make us different. Same thing happen here. Thanks for posting such a useful and informative blog.