The Case For The 20-Mile PHEV
I’ve been somewhat fascinated by the Ford Energi products since they came out. I haven’t had a chance to drive one yet, but I’ve seen a few on the roads and at charging stations. Everyone here probably knows what they are. Just to recap, they are basically souped up hybrids with plug-in capability and an all electric range of around 21 miles.
A lot of people balk at such a low range. In fact, one of the most commonly requested features on the Chevy Volt forum is for more all-electric range.
Driving a Volt myself, I certainly wouldn’t mind more range either. However, I don’t really need it. In fact, with my 10-mile daily round-trip commute, one of the Energi models could easily provide me with an all-electric driving experience and still leave some extra range for small side trips during lunch or after work. In most cases I could fully recharge about an hour after getting home on my 240V setup. Then I’d be ready for some more all-electric driving in the evening. I can’t be alone. There must be millions of people with commutes like mine.
Lets talk about some of the advantages of a 20 mile PHEV:
The battery charges faster. Well, not really. I tend to look at battery charging as a measure of miles-per-hour. I don’t care about full-recharge time because it is very rare that I’m charging a fully depleted battery. On a 240 volt station, the Energi models charge at about the same rate as a Volt, about 10 miles for every hour. However, the general population seems obsessed with charging times, for some reason. And to be able to say it charges in 2 hours is a great marketing gimmick.
- Battery pack should be half the cost of a Chevy Volt and much less than half the cost of a pure electric vehicle. Being that the battery is the biggest expense of a setup like this, that can significantly lower the cost of the vehicle compared to more capable plug-ins.
- Because the battery is small (compared to a more capable EV) it should be possible to retrofit that battery into just about any car body. Obviously under the floor would be ideal, but even the cargo area can work. That’s a big cost savings for manufacture.
- The drivetrain can be identical to any other 2-motor hybrid system, without much of any change. Again, another big cost savings for manufacture.
- Despite anemic acceleration performance in EV mode, full hybrid mode can actually outperform other more capable PHEV and full electric vehicles.
- Less risk for both the manufacturer and the consumer. The manufacturer has to invest less money to develop the car, since it is based on existing designs. So if it doesn’t sell, the loss is much smaller. Also the warranty should be less risky since most of the car will already be tried and true. As for the consumer, they pay a smaller premium over a regular hybrid, thus lowering their financial risk and almost ensures eventual payback.
- People who are looking for financial payback but have short commutes have a hard time justifying the cost of a Chevy Volt or all electric car if their commute is 20 miles or less anyway. After all, they won’t use much gas with such a short commute no matter what kind of car they drive.
So, why aren’t they selling better? Ford currently sells roughly 500 units per month on the C-Max and Fusion Energi models (roughly 1,000 combined between the two models.) By comparison, GM sells roughly 2,000 Volts per month on average. Heck, that number may even double with the recent price cut. I think there are many reasons for this, and some solutions.
The tax credit structure is one issue. Since the Energi models qualify for a $3,750 tax credit and the Volt qualifies for a $7,500 credit, in most cases you can drive away in a Volt for about the same price as a C-Max Energi. If leasing, you will probably get a lower payment on a Volt due to the structure of the leases and how the federal tax credit works. This reason, more than anything else, is why I have a Volt in my garage and not a C-max Energi. However, this will change when the tax credits go away.
- Lack of manufacturing capacity. Some sources have said that Ford simply doesn’t have any more capacity in their Michigan plant to produce more of them because the factory is already pumping out so many gasoline cars.
- The price tag is another problem, sort of. They seem to be selling plenty of C-Max hybrids with a base price of $25,200. But not so many C-Max Energi models at 32,950. However, if you calculate in the tax credit of $3,750 that brings the energi model down to $29,200. That already puts it in the running with a better equipped C-Max and since the Energi model is pretty well equipped, that actually makes the price about the same. But I’ve heard Ford is secretly giving up to $5,000 discounts on these cars, which actually means you could get an Energi for $24,200. So you could theoretically buy an C-Max Energi for less money than a base-model C-max and get more equipment too! I think a lot of people just get sticker shock when they see the MSRP and just don’t know any better.
- As for the Fusion Energi, that’s a different story. A base Fusion is $21,900. But A Fusion Energi is $38,700. Even with the tax credit and $5,000 discount the price tag is still $29,950. That’s a hard number for a lot of people to swallow. And while the Fusion hybrid is $27,200, people will probably make the comparison to the gasoline-only version when running their numbers on fuel savings. The solution to this problem, besides lowering the price some, is to get people to realize that driving on electric is fun and making less trips to the gas station not only saves money but is convenient.
- The last, but definitely not the least problem, is the battery packs being crammed into the cargo area. The C-Max Energi has virtually no cargo area at all. This is a deal breaker for a lot of people. This problem could easily be solved by re-engineering the body of the car to accommodate the battery pack underneath the car. However, this sort of defeats one of the advantages mentioned above, which is being able to use existing car designs. My hope is that the next generation of these vehicles will solve the issue. I also expect that battery sizes will shrink over time, which will also partially solve this problem.
So to summarize. I believe the 20-mile PHEV can be a very viable product in the future, mostly because the entry barriers are lowered for both the consumer and the manufacturer. With tax credits gone, the price will be much more competitive than more capable cars. In fact, I’m going to make a prediction that within 10 years this concept may replace the traditional hybrid vehicle completely due to a reduction in battery cost and size
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