How New EPA Window Stickers Could Increase Plug-In Electric Car Sales

MAR 13 2015 BY MARK KANE 25

2016 Volt LTZ Mosaid Black Metallic - Click To Enlarge (editor's note: the coolest and probably fastest version of the 2016 Volt)

2016 Volt LTZ Mosaid Black Metallic

According to the article titled “Effects of providing total cost of ownership information on consumers’ intent to purchase a hybrid or plug-in electric vehicle” published in the journal Transportation Research Part A: Policy and Practice, including the total cost of ownership (TCO) numbers on the EPA labels for cars (not just fuel savings) would increase the sales of plug-in electric cars.

We think this would be true since the TCO for most plug-in electric cars is lower than for conventional cars.

We agree that additional indications on the window sticker with positive numbers would be noted by customers and likely affect their buying decisions.

“Energy-saving technologies have a difficult time being widely accepted in the marketplace when they have a high initial purchase price and deferred financial benefits. Consumers might not realize that, in the long-run, the financial benefits from reduced energy consumption offset much or all of the initial price premium. One strategy to address consumer misconception of this advantage is to supply information on the “total cost of ownership”, a metric which accounts for the purchase price, the cost of the fuel, and other costs over the ownership period. In this article, we investigate how providing information on five-year fuel cost savings and total cost of ownership affects the stated preferences of consumers to purchase a gasoline, conventional hybrid, plug-in hybrid, or battery electric vehicle. Through an online survey with an embedded experimental design using distinct labels, we find that respondent rankings of vehicles are unaffected by information on five-year fuel cost savings. However, adding information about total cost of ownership increases the probability that small/mid-sized car consumers express a preference to acquire a conventional hybrid, plug-in hybrid, or a battery-electric vehicle. No such effect is found for consumers of small sport utility vehicles. Our results are consistent with other findings in the behavioral economics literature and suggest that further evaluation of the effects of providing consumers with information on the total cost of vehicle ownership is warranted.”

5-year TCO (with “financing, depreciation, registration, maintenance and insurance costs” and probably incentives) could provides a better indication of how much a price premium will be offset than by simply listing fuel savings only, but this is a complicated task with a lot of assumptions.

Maybe the EPA should develop a new interactive tool with graphical presentations of total costs for every model for the first several years to make base and individual comparisons possible? To count/establish a 5-year TCO, the EPA would need to count TCO for each and every year anyways.

Source: Effects of providing total cost of ownership information on consumers’ intent to purchase a hybrid or plug-in electric vehicle via Phys.org

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25 Comments on "How New EPA Window Stickers Could Increase Plug-In Electric Car Sales"

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The problem with TCO numbers is that depreciation is extremely hard to predict with a plug-in, especially with subsidies that vary state to state. You really need a TCO calculator where you can see how changes in assumptions affect TCO. That just won’t fly on a window sticker.

Perhaps you could put a huge range on the sticker in which the top end of the range still beats a gas burner.

Meh. The numbers they already use are hard to predict and often wrong. For example, gas prices fluctuate a lot and electricity prices vary heavily across the country.

But it is still useful information at least on a relative scale.

Some stuff, like insurance, is so variable that the gov’t would have a hard time calculating it.

Edmunds gets around this when they calculate their True Cost to Own by simply getting all of their insurance information directly from Progressive Insurance through a partnership.

Key being ‘relative’. +1

Gotta make a banner comment. I know we all see different ads, but I just noticed on a foray (I promise) over to Foxnews.com Toyota is running ads for ‘The furure of mobility is on the move’ http://tinyurl.com/nbwvcfq -that pic should feature an undoted up, frumpy plugged-in trike. On this site, the image is fancy, a slo-mo pan shot, of the same weird car, the Toyota link calls: “Nimble and colorful TOYOTA i-ROAD EVs”.

I see Toyota is !!Going EV!!, with all three feet.

Car manufacturers are going to scream bloody murder over this. The last thing they want consumers to think about when looking at a car is exactly how much more that car is going to cost them on top of the high price they are already paying.

While I am all for transparency and simplicity, I am skeptical that the sticker will help “sell” many extra PEVs. It will help clarify things though.

In my opinion, the problem with the current layout for EPA window stickers is it presents the information in a confusing manner. The layout shown above does have the advantage of making clear what at least -some- of the figures represent. However, as previous comments have noted, a lot of those numbers are going to be at best inexact, at worst just guesses.

This is why even if we stick with $7500 Tax Credit for an EV, it should be deducted at purchase. Which more accurately brings down the ‘monthly cost of ownership’ of the plug-in hybrid and EV.

Isn’t MPG for a BEV infinity?

For the electric miles it’s MPGe.

you guys need to go metric and forget miles and gallons, you are the only country in the world who still uses them.

I would prefer two simple ratings:

Miles per gallon (MPG) when running on gasoline.

Miles per kW-H (MPK) when running on electricity.

Numbers beyond that are almost useless, since they depend on unknown widely varying fuel/electricity prices and usage patterns.

Mr — The EPA ran extensive study groups across the US when they first created window sticker for electric vehicle. They found out that their study groups overwhelming did not want anything in kilowatts. In fact, the study groups responded that they overwhelmingly didn’t even know what a kilowatt was. Even worse, when asked if they wanted to learn what kilowatts were, they overwhelmingly responded that they didn’t even want to be taught about kilowatts. They wanted a metric that they could compare directly to MPG. The EPA came up with MPGe, and the study groups overwhelmingly chose them over any other metric. This was what they intuitively felt the most comfortable with. Even though when asked about MPGe’s, they clearly didn’t truly understand the math or science behind determining MPGe. The EPA threw EV enthusiasts a bone by putting kW-hrs per 100 miles in small print, while putting MPGe in big print for everyday consumers. Since most EV enthusiasts ultimately want to see the wide-spread adoption of EV’s among mass consumers. For that to happen, we enthusiasts have to be willing to meet the mass market in the middle. If they want MPGe in big print, that’s what we… Read more »

Thanks for this. Very interesting. And I like the decision since all the information is provided.

Study groups … that’s funny.

In the real world, bureaucrats first decide what they’re going to do, then they justify their decisions with fake surveys and “study groups”.

If federal bureaucrats actually cared about their customers, then the US tax code would not be 74,000 pages long, and it would not take NINE separate numbers to quantify the efficiency of a car.

Yes, the MPGe ratings are pretty useless — you can easily find examples which clearly don’t reflect real-world driving, and are misleading when it comes to comparing different vehicles — and are a crutch for those only familiar with MPG ratings. Consumers need to be educated on what “miles per kWh” means. Eventually, as the EV revolution progresses, they will have to be.

In the meantime, the EPA isn’t helping matters any by using a “kW-hrs per 100 miles” rating on current window stickers. For that, a -low- number is better, which is confusing even for customers with some education regarding EVs.

They are certainly NOT useless. They strongly show the relative efficiency of gas versus EV cars.

People don’t buy/lease new cars using logic. It’s an emotional or self-image purchase.

People that are logical buy used cars that blow new car numbers away.

This post is may seem some what unrelated, but the earlier topic of rebates do factor into TCO, and I don’t normally post to these various EV web sites, I read them all and I enjoy them because of everyones passion FOR EV’S generally. I have a 2013 leased Leaf that will have $9000 residual value at the end of a 4 year lease. Nissan is finding that their projected residual values were too high and are now requiring a larger down payment of approximately $5000 to get to a $199/mo lease price. The rebate aplied to the lease was the only way I could get into an EV. It is not the Tesla I will some how eventually be driving, but it allowed me to participate in the EV revolution. My thought is that the rebate is far from fair or equitable, but it has been effective, because we are now progressing toward 200 mile EV’S in approximately 18 months. My Leaf will be one more amongst many Leafs, Volts and others that will be driven down into the used car market, with relatively low mileage, well maintained, safer and financeable base on fuel savings, to less fortunate low… Read more »

Additionally, I run a Garbage company and have a goal of doing $200k conversions to class 8 trucks,, possibly through Wrightspeed, that may have a 6 year payback.

Thanks

It’s even worse for PHEVs since real life ends up as a combination of the ICE and battery numbers….and really worse for cars that can’t acieve full performance in EV mode and the engine keeps kicking on, etc. I do hope that as we see low cost used Leafs and Volts hitting the market, we will get more of the average Joe buying them. Still, few people just seem to “end up” in an EV of any sort, and frankly for the average apartment dweller they are still generally a poor choice. It may be that the only thing that will kick start this is the 200 mile BEVs…TBD.

I bought a used Volt recently for $16,000. A same year, same miles Prius is going for $24,000. I drove both and the Volt obliterates the Prius in fuel cost, handling, responsiveness, and acceleration.

That cost differential is an artifact of a lack of knowledge and info. Sure, it’s the Federal Tax Credit that makes the difference in price, but the substitution effect would, in terms of economics, leave the two near equal in price if consumer knowledge was present.

In time it will be crystal clear that, given such a premium in cost, a Volt is not just a better option, but the only option.

I think it will be a few years, but it is inevitable once EVs enter the mainstream. Especially once enough EVs are sold to trigger the end of the Federal Tax Credit.

Isn’t this the same way Tesla has been selling cars with their own TCO webpage on the Tesla site? Seems to be working well for them.

This is nice but IMO most people either don’t understand or don’t value total cost of ownership. This is the case with anything, not just cars.

Add to that the fact that a car purchase is often an emotional choice as others have said. Why else would someone buy a car that goes 150mph when you’re never going to actually drive that fast?

Which sticker is the bottom left one?

40 miles EV range, 117MPGe and 45mpg on CS mode?

Is that the new Volt? =)