with location and even time of day but we don’t know when or where people will recharge their BEVs.
Beyond this, several utilities provide a minimal residential service at a low rate and then charge more
per kWh for usage above this threshold. Published average residential rates presumably represent a
mixture of these two rates, but if we assume that car-charging will occur in addition to normal
domestic use, unless these rules are changed, it seems likely that the owner of a BEV may have to pay
somewhat more than the published "average” rate to charge his/her car.
Trying to determine the energy costs of running a BEV over a 10-year period raises additional questions
related to the average number of kilometers driven and the rate at which electricity rates and
gasoline prices will increase over the next decade. Will recent massive reductions in the cost of
installing PV-solar arrays and large wind turbines cause rates to fall? Or will they rise because of the
increased power usage related not only to the electrification of our road and rail transport but also to
the need to replace the energy used to heat our homes and businesses when burning fossil-fuels is
curtailed to control climate change?
Service costs are another source of uncertainty. Electric powertrains require virtually no routine
maintenance, however, we do not yet have enough experience to know the average life of present
battery packs. Early data from TESLA vehicle owners shows that after an initial 5% drop in capacity over
the first 40,000 km, most batteries didn’t drop below 90% of their original capacity until after 250,000
km. Although this is close to the distance travelled by the average Canadian car in 10 years, it is not
clear that the 10-year service costs for a BEV should include the cost of replacing a battery today. First
of all, improvements in battery design and operation seem likely to make newer batteries last longer.
In addition, a modern car with a 90% battery capacity still has a significant range. Finally, it seems very
likely that over the next decade, an industry will spring up to refurbish and replace such batteries for
much less cost than the present cost of a new battery. Indeed, a factory for this exact purpose has
already opened in Japan.
Despite these uncertainties, we believe that current data will still allow us to make an accurate
estimate of the relative operating costs of ICEVs versus BEVs.
Choosing Vehicles to Compare
To confront the plethora of model choices, we have confined our study to two models from two
manufacturers: one from Asia and one from Europe. These cars are widely available in North America