‘Little’ Errors Add Up: What an Electric Vehicles Study Gets Right, and What It Gets Wrong

, senior engineer, Clean Vehicles | December 21, 2016, 4:14 pm EST
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A new study by consulting firm Arthur D. Little (ADL) claims that the benefits of electric cars, both environmental and economic, are lower than others, including UCS, have shown. However, the differences are largely due to questionable assumptions about battery replacements and the use of electric vehicles as a gasoline car replacement.

What they get right

EVs on average have lower overall greenhouse gas emissions and lower costs to fuel than gasoline cars now, and these benefits are likely to increase over time. This is the conclusion of our report and also the ADL analysis. In our report, “Cleaner Cars from Cradle to Grave”, we found that the average electric vehicle results in about half the climate changing emissions than a comparable gasoline car, even when the manufacturing emissions are included. The ADL study finds a lower benefit, about 20 percent, due to assumptions discussed below. However, they also note that the emissions savings will likely grow over time as electricity generation becomes cleaner, consistent with our findings.

What they get wrong about emissions

The ADL analysis and the UCS analysis of greenhouse gas emissions is largely the same except for two factors: battery replacement and the need for a replacement gasoline car to accompany the electric car. These two factors account for nearly 40 percent of the ADL estimate of emissions from a battery electric car and therefore are critical to understanding the benefits of electric vehicles.

The ADL study assumes that all EVs will need a replacement battery after seven to ten years of use. The study cites the fact that “this is consistent with the warranty that BEV manufacturers offer on their vehicles’ battery packs” to bolster this claim. However, by analogy, gasoline cars would be expected to need a new engine and/or transmission after the expiration of a five-year powertrain warranty. We don’t know what the true lifetime and failure rate for electric car batteries are, especially for today’s second generation battery systems since they’ve only been on the market for a few years. But assuming a battery replacement at 7-10 years is a 100 percent failure rate for the battery system. Making this assumption would require some proof, and yet there’s no evidence that this is the case for battery lifetime.

The largest factor inflating the ADL estimates of emissions is the assertion that drivers of electric vehicles would require a replacement gasoline car for about a quarter of all miles driven, because electric vehicles are driven fewer miles per year than gasoline cars. This questionable assumption is critical to the lower electric car benefits seen in the ADL report: it increases their emission estimates from an electric vehicle like the Nissan LEAF by 28 tons, while the baseline estimate of  LEAF manufacturing and electricity use only totals 69 tons.

The ADL study chooses an unlikely scenario — that an EV buyer would purchase a vehicle that covers only 75 percent of their trips — to arrive at their emissions estimate, rather than doing a straight up mile for mile comparison. This argument is based primarily on early electric vehicle use data from Idaho National Laboratory that showed Nissan LEAF drivers drove on average 9,700 miles per year, while gasoline cars average around 12,000 miles per year. But since that data was collected, charging infrastructure has improved and electric car drivers are going farther. Per California Air Resources Board data, drivers of 2013 and 2014 Nissan LEAFs are going an average of 11,000 miles per year. But perhaps more important, it looks like at least some of the lower mileage in electric cars is not due to the technology, but instead the lease terms that many electric car buyers choose. Auto companies have offered very attractive low-mileage lease terms for electric vehicles, with 10,000 – 12,000 miles per year included in the lease contract. Nissan LEAF drivers that chose a 12,000 mile or lower lease drove on average 9,000 miles per year, while those on a 15,000 mile lease drove over 12,000 miles per year on average. If the lower annual driving for an electric vehicle is not due to technical limitations, then there is no basis for adding gasoline vehicle use to the emissions analysis of electric cars.

However, even if electric cars were being driven fewer miles, the assumption that additional gasoline miles would be needed is biased. Drivers will choose electric cars with a range and capability that meets their travel needs. Someone who requires the ability to regularly drive long distances without refueling is unlikely to choose a short-range battery electric car as a replacement for a gasoline car. That’s not to say that they couldn’t drive electric; however, they would likely choose a longer-range electric vehicle. The comparison chosen in the ADL study overestimates emissions from assumptions about the behavior of the drivers, not the actual emissions from making or using the vehicles.

What they get wrong about costs

While our report focused on the climate-changing emissions from cars, the ADL study also attempts to estimate the difference in costs between electric and gasoline cars. The same choices (100% battery replacement rate and the need for a rental gasoline car) that inflated the emissions estimates also have a large impact on the economic estimates. For example, the cost of the rental gasoline car to make up for miles driven below the national average adds over $10,000 to the ADL estimate of the lifetime electric car cost and adds over 15 percent to the cost estimate. As noted above, these costs are unlikely to occur because a consumer who needs to rent a car 25 percent of the time is not likely to choose a short range EV to begin with.

The next generation of electric cars will be even better

The next generation of electric cars are already starting to show up on dealership lots. Starting with the Chevy Bolt, there are likely to be several battery electric cars that combine longer range, the ability to quickly recharge, and at a more affordable price. These features will make it cheaper to use an electric car and also allow displacement of even more miles that are currently driven using gasoline. Combined with cleaner sources of power, electric cars will likely show even more benefits in the future compared to gasoline vehicles.

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  • Mark Renburke

    Drive Electric Cars New England just produced this new analysis: “Can a $33,000 Electric Car Be Cheaper To Own Than A $20,000 Honda Civic?”
    http://www.hybridcars.com/can-a-33000-electric-car-be-cheaper-to-own-than-a-20000-honda-civic/

  • neroden

    Thanks for the debunking. Those are some *awful* assumptions ADL made.

  • solodoctor

    Thanks for an informative analysis. Seems pretty clear that EV’s offer many advantages, especially in regions where electricity is generated via cleaner sources.

    The WaPo has run a series of 3 articles recently on the extent to which the extraction of three elements used to make the batteries for EV’s causes serious environmental damage Me health problems for people working and living in these areas: graphite in China, cobalt in Congo, and lithium in S America. I realize that some of this might be mitigated by recycling these batteries. But the human and environmental costs are terrible. Will UCS please address these issues?

  • pgjack

    I’ve had my EV since March 2014. The only time I have rented a ICE car is when on a trip that required airline travel. I would have rented an EV if that option had been available. Our local power plant is natural gas and the solar panels on my roof supply 80% of our electric power needs including the car. My Tesla is great and EV’s will only get better as will sustainable energy tech. Ten years from now new Gasoline cars will be hard to find, expensive to buy and, since many gasoline stations will have closed, ICE owners will suffer range anxiety.

  • Mark Renburke

    An additional serious TCO (Total Cost of Ownership) flaw in the Little study: For initial consumer cost, rather than what a typical consumer will actually pay, they instead used something they call “True Vehicle Cost” (of $17k for the ICE and $29k for the BEV) where they are using the full estimated production-to-delivery cost to manufacturer, dealer, and incentive providers (federal/state EV credits/rebates are excluded).

    This has virtually no relevance to what the consumer will actually pay, which is what any other industry TCO analysis would use. By ignoring what consumers actually would and do pay for a vehicle, their method deflates the ICE cost by several thousand dollars because it costs less to produce and has a higher profit margin because there are no incentives, while inflating the BEV cost by at least $7,500 (EV tax credit) or more (such as $2,500 state rebates).

    Any attempt at a real world assessment would use a comparison of what consumers are actually paying for comparably equipped base models with real world sales data(something most other TCO analysis commonly do) Here is the relevant contradictory statements from the Little study:

    “With regard to our TCO analysis, ADL decided to model the related economics of BEVs and ICEVs from the perspective of an individual consumer operating under real world conditions… we removed the effect of federal and state incentives and subsidies on BEVs and ICEVs, so that our figures would reflect the true underlying costs of R&D, manufacturing, ownership and operation, and end-of-life of these vehicles.”

  • RobSez

    The flaw with both the ADL and UCS reports is they are both based on assumptions founded on guesswork data. I know the car makers aren’t sharing any information and the DOE data is at least 3 years old because I was part of it. How about somebody gathering empirical data from people who actually drive EVs?

    For example, every so called ‘expert’ will tell you anyone driving a Nissan Leaf must also have a ICE vehicle. Wrong. I haven’t had a ice car since February 2015. I average 1300+ miles a month and 16,000 miles per year in our Leaf. We also average about 1,200 miles per year in rental cars for a fraction of the cost to own an ICE. If more EV drivers shared vehicles from the pool of available rental cars, we could have fewer cars on the road at any given time.

    C’mon, scientists. What ever happened to using the scientific method we all learned in middle school?

  • Chris Coza

    In my case of a two car family. The electric replaced 95% of one car, and as the prefered vehicle it also displaced a further 50% of the remaining ICE vehicle.

    • neroden

      In my case we went from two gasoline cars to one Tesla.