<story><title>How automakers can drive electrified vehicle sales and profitability</title><url>http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/electrifying-insights-how-automakers-can-drive-electrified-vehicle-sales-and-profitability</url></story><parent_chain><item><author>PostOnce</author><text>At some point, the tax structure for cars has to be changed to account for electric vehicles wearing the roads and not yet paying to maintain them? I&amp;#x27;m not sure, but I think that&amp;#x27;s what fuel tax pays for? So, the cost will go up at some point in that sense.&lt;p&gt;Then, on the other hand, $3&amp;#x2F;gal is a US-only phenomenon among countries that can really afford electric cars, everywhere else it is ~2x that? Europe, japan&amp;#x2F;korea&amp;#x2F;australia? I could be wrong here too but I think that&amp;#x27;s how it is. So there electric may already be quite a bit cheaper, depending on generation cost.</text></item><item><author>zackmorris</author><text>I had no idea lithium ion batteries had become so inexpensive.  Here is the top search for &amp;quot;kwh battery&amp;quot; on eBay right now:&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.ebay.com&amp;#x2F;itm&amp;#x2F;Li-ion-Lithium-24vdc-100ah-2-4kwh-NEW-2015-VOLT-Battery-Off-Grid-Solar-Battery-&amp;#x2F;182436435488&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.ebay.com&amp;#x2F;itm&amp;#x2F;Li-ion-Lithium-24vdc-100ah-2-4kwh-NE...&lt;/a&gt;&lt;p&gt;So with shipping, $869.96 for 2.4 kwh, or about $362&amp;#x2F;kwh.  A $3 gallon of gasoline has 33 kwh, but only 8 kwh of usable energy due to the inefficiency of internal combustion engines, so $0.375&amp;#x2F;kwh.&lt;p&gt;So batteries are somewhere around 1000 times more expensive than gasoline, but, if they can be recharged more than 1000 times they may actually be cheaper.  1 kwh of electricity costs about 10-20 cents usually (call it $200 per 1000 charges).  That&amp;#x27;s a total of $1069.96 for 1000 cycles, maybe $1269.96 for 2000 cycles, etc, something on that order anyway.&lt;p&gt;So $1 per cycle per kwh is pretty close to a breakeven against gasoline, and batteries are only going to get less expensive.</text></item></parent_chain><comment><author>nradov</author><text>The vast majority of road wear is caused by heavy trucks. Passenger cars including electric models have very little impact on existing roads.
But it would certainly make sense to shift road infrastructure funding more toward vehicle registration fees.</text></comment>
<story><title>How automakers can drive electrified vehicle sales and profitability</title><url>http://www.mckinsey.com/industries/automotive-and-assembly/our-insights/electrifying-insights-how-automakers-can-drive-electrified-vehicle-sales-and-profitability</url></story><parent_chain><item><author>PostOnce</author><text>At some point, the tax structure for cars has to be changed to account for electric vehicles wearing the roads and not yet paying to maintain them? I&amp;#x27;m not sure, but I think that&amp;#x27;s what fuel tax pays for? So, the cost will go up at some point in that sense.&lt;p&gt;Then, on the other hand, $3&amp;#x2F;gal is a US-only phenomenon among countries that can really afford electric cars, everywhere else it is ~2x that? Europe, japan&amp;#x2F;korea&amp;#x2F;australia? I could be wrong here too but I think that&amp;#x27;s how it is. So there electric may already be quite a bit cheaper, depending on generation cost.</text></item><item><author>zackmorris</author><text>I had no idea lithium ion batteries had become so inexpensive.  Here is the top search for &amp;quot;kwh battery&amp;quot; on eBay right now:&lt;p&gt;&lt;a href=&quot;http:&amp;#x2F;&amp;#x2F;www.ebay.com&amp;#x2F;itm&amp;#x2F;Li-ion-Lithium-24vdc-100ah-2-4kwh-NEW-2015-VOLT-Battery-Off-Grid-Solar-Battery-&amp;#x2F;182436435488&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.ebay.com&amp;#x2F;itm&amp;#x2F;Li-ion-Lithium-24vdc-100ah-2-4kwh-NE...&lt;/a&gt;&lt;p&gt;So with shipping, $869.96 for 2.4 kwh, or about $362&amp;#x2F;kwh.  A $3 gallon of gasoline has 33 kwh, but only 8 kwh of usable energy due to the inefficiency of internal combustion engines, so $0.375&amp;#x2F;kwh.&lt;p&gt;So batteries are somewhere around 1000 times more expensive than gasoline, but, if they can be recharged more than 1000 times they may actually be cheaper.  1 kwh of electricity costs about 10-20 cents usually (call it $200 per 1000 charges).  That&amp;#x27;s a total of $1069.96 for 1000 cycles, maybe $1269.96 for 2000 cycles, etc, something on that order anyway.&lt;p&gt;So $1 per cycle per kwh is pretty close to a breakeven against gasoline, and batteries are only going to get less expensive.</text></item></parent_chain><comment><author>prostoalex</author><text>States already rely on a variety of revenue sources, such as vehicle registration fees and tolls, in addition to gasoline taxes.&lt;p&gt;Ultimately I don&amp;#x27;t see how one could institute a fair system without converting all roads to toll roads (perhaps with variable pricing to manage demand).&lt;p&gt;Gasoline taxes are a reasonable proxy for &amp;quot;usage&amp;quot;, so heavy users contribute more.&lt;p&gt;Registration fees treat everyone of the same make and model the same, be it a livery vehicle with six-digit annual mileage or a proverbial old-lady whose car is being driven around town twice a week. And one can&amp;#x27;t exactly levy a tax on kWh.</text></comment>