GMC is out with a new car called the Spark. Nice name, but what is the bottom line and how do we analyse and compare all these different kinds of cars? Which one is the best or is anyone of them the best? What I have found is that there are so many different ways that people are comparing the different options that no one can figure out exactly which one is correct or the best. I think that I have come up with a universal way to deal with this problem that most people will be able to understand.
First, a little back ground. For over 50 years, we have been looking at cars on the basis of gas mileage or MPG. It is not a bad way, but I don't think that it is the best way. Our government has gone so far as to dictate what the average MPG has to be for a manufacturer to sell cars in the USA or a specific state. That is not all bad either, but it misses the main objective. Oh, an objective. The first thing we need to do is to agree on an objective, if we can't do that, there is no way that we can ever make the correct decision. First, I want to tackle the objective.
Here is my take. I feel that the objective should be to minimize the "energy" required to transport a person on our road system using an automobile. We all know that a bus is more efficient than a car with one person in it, but people have to be able to get to work, the store and school, so I am going to limit this to the car with just one person in that car. I used the word "energy" as opposed to "gas" because most energy is fungible. You must already know what fungible means so I am not going to repeat the definition here. Consider the gas or fuel the car burns as energy as well as the car itself. To build the car, we had to consume energy to smelt the metal and to make all the plastic and other parts. The people who worked on the car had to get to work using energy in their car and they had to have cloths, shelter and food that came from energy. Now, you must be asking how I am going to make this work if I have all these sources of energy going into the car? As it turns out, we have a very simple way of doing that. Everything has a cost and if we just add up the cost, we have the cost of all the energy that went into the car. As I pointed out above, energy is in everything of value and it is measured in terms of what it cost. We just need to add it up and we do that by calculating the cost to drive this car a mile so we have CPM (cost per mile) vs MPG (miles per gallon). Are you with me on this? Remember we what to save "energy" and CPM is a good measure of EPM (energy per mile). Here we go with some numbers.
When I say CPM it is the same as EPM and it includes "all" the cost that goes into the car, even if it is some kind of government rebate. A rebate is cost too, so I am going to add it into the numbers. In this blog, I can not go into every possible kind of car, so I am only going to analyse a couple so that you get the idea. The two cars will be as follows: A standard gas powered car and a hybrid. The gas powered car has a new cost of $25,000 and the hybrid $35,000 with a rebate of $7,500 for a total of $42,500. The gas car gets 30 mpg and the hybrid gets 40 mpg. Both drive 25,000 per year. The test period is 8 years. The maintenance for gas powered is $250/yr and the hybrid is $2,750/yr. The cost of a battery for the hybrid is $10,000 and two will be needed for the 8 year test period. The salvage value of the gas car will be $5,000 and the hybrid $10,000 at the end of 8 years. Now I think we have all the numbers that we need except for gas and we I will assume that it will cost $3.50/gallon. If you do not agree with these numbers, you can come up with your own and do your own calculations for comparison, so here we go.
All I did was to add up the numbers and divide by the 200,000 miles driven and here is what I get. For the gas car, the CPM was $0.227 and for the hybrid the CPM was $0.360. The CPM for the hybrid was 59% more than the gas powered car. Based on the consumption of energy the EPM for the hybrid car was 59% more than the gas powered car. That is the bottom line. Now what can we draw from all this?
First, you have to be honest about the cost of things. Rebates and government money is still part of the cost. Second, it is very difficult to save energy with something that is expensive since the cost of the items is make up mostly on energy. You can apply this concept to almost anything. How about the cost of a T-bone steak compared to black beans and rice? Which one has the higher cost and which one used the most energy? How about a big house compared to a small house? Same thing. I think that once you see the connection between cost and energy that it will be a lot easier to come to the correct conclusions in area that appear to be complex.
One final point. I keep hearing people who do not understand technology claim that the cost will come down as production goes up and thus government money is needed to get the ball rolling. To a degree this is true, but what people do not understand is that all this, so called, technology is "mature" and has been around a long time and thus most of the gains have already been taken. The basic learning curve concept is based on an improvement of some percentage every time the number produced doubles. We have already made over a billion batteries so for the cost to go down by 5%, we will have to build another billion, not the 200 or 300 being discussed. Wind mills, for example, have been around for over a thousand years the technology is very mature. We have made over a billion motor/generators like those in wind mills already, so we will have to make at least a billion more before we get the cost down another 5%. There is no way that we can get the cost down by more than 25% and it would take a lot more than that for wind mills to be economical. Not, also, that the Lithium Ion battery was invented over a hundred years ago. It is "not" new technology. Why our university professors have not been putting out research papers exposing the folly of hybrids and green energy is still a mystery to me as it must be to you. These professors who should know the truth were someones children. How can they not be more responsible?
