Vancouver: The most attractive place on earth for an EV?
Gary Holden
Managing Director Lodestone Energy, Director and investor in solar power, power generation, energy retailing and financial services.
Vancouver, Canada looks like it might be the most attractive place on earth for an electric vehicle.
Based on current gasoline and electricity prices, and an assumed average commute of 50 km per day, you could commute for 13.1 years on electricity for the same cost of only one year of gasoline. Even though this advantage has been reduced lately with lower oil prices, (only a couple of years ago, Vancouver’s Gasoline to EV ratio (GEVR) would have been over 17 to one) the idea of an EV in the lower mainland of BC remain a very lucrative idea (note 1).
These are interesting numbers to say the least. Over a person’s lifetime, living in Vancouver and simply driving an electric car could mean a person’s wealth would be increased by over $80,000 USD (note 2). If, or when, $100 oil prices come back, that wealth creation could increase by up to two times quite readily. In cities with higher fuel taxes, like Amsterdam, an EV in would produce over $100,000 USD net worth gain over a person’s lifetime (note 3) at current oil prices.
Other Canadian cities, such as Calgary and Montreal, are not far behind Vancouver with GEVRs of 11.5 and 10.4 respectively. Auckland, New Zealand is also in the same ballpark at about 10X. On the other end of the spectrum, Tokyo, with very high electricity prices (Fukushima has had an impact) has a GEVR of only 3.1. (Putting Japanese car makers in a quandary as their local market has a relatively light economic impetus to switch over.)
Cities that have issued future bans of ICE vehicles, such as Paris, Oslo, Amsterdam, and London, would be observing GEVRs between 4.0X and 9.0X (note 4); providing the positive support for those restriction decisions.
City and state governments are not blind to this. With consumers getting gains, these differentials increase the capacity to tax this lower cost of energy and compounding the effect with broader carbon taxes can increase the tax intake; providing much needed help to balance government budgets. Even Beijing, with a current GEVR of 3.3, the idea lowering smog levels and getting more tax dollars for roads and other municipal infrastructure will be worth creating EV car incentives for.
If you wonder about the capital cost of buying an EV, you probably shouldn’t. Depreciation on a vehicle with an operating costs advantage of 10X will likely be far less than one on the wrong end of the equation. Said another way, it would be quite worrying to purchase a high cost internal combustion car right now. It doesn’t look like the safe bet from a revaluation point of view.
Even trucks and SUVs are turning electric as Ford and Chevrolet roll out their new models. New truck-based EV companies, such as the technological wonder from Rivian, will give them a run for their money just as Tesla has with cars and SUVs.
If you live in Vancouver, you might be wondering where all the electricity is coming from as each car would draw around 2,700 kWh per year. You don’t need to worry about that either as BC has plenty of hydro-electricity (over 9,000 GWh), currently sold to California. This is enough to power 3.2 million of the 3.7 million cars registered in British Columbia.
In terms of energy supply, what about world cities without hydro surpluses? Solar power will be the perfect solution to contribute to the added demand for electricity. Since solar power is now at parity in most markets, the resulting daytime electricity prices would not increase costs to consumers as current daytime capacity would shift to the night-time period.
Finally, with oil supply in disarray, oil prices are expected to rise in the short-term; making the benefit of electric cars even more appealing. With these market forces at play, the shift to electrification is pretty much a guarantee now.
Notes:
1. Assumptions: 8.9 L/100 km for a Canadian ICE, 8.1 for a Australasian ICE, 7.2 for a Japanese/European ICE and 15 kWh/100 km for EV. SUV ICEs and EVs are likely to be up to 25% higher in both cases.
2. Current exchange rates to convert to USD provided by X/E Exchange.
3. Lifetime of 50 years (years of driving)
4. Residential Off-peak power prices (where available) and local gasoline prices from Google searches on July 27, 2020.
Principal
3 年Gary, very interesting info. Do you have any forecast info on electricity costs with this significant increase in North America demand. I assume that significant capital costs will be required that will be passed on to the consumer. Is that assumption reasonable?
Managing Director Lodestone Energy, Director and investor in solar power, power generation, energy retailing and financial services.
4 年It has been pointed out to me that I was wrong about Vancouver. With Vancouvers two tiered pricing, an EV would likely face higher costs for charging as it would likely land at the higher price 2nd tier. If this is the case, Calgary and Edmonton would become the most economic places on Earth for an EV; as the electricity charge structure is heavily fixed and therefore incremental volume is cheap... the opposite to Vancouver rates. So, Alberta has the strongest incentive to use an EV... world-wide...seems a wee bit ironic, but it’s true!
Director Business Development - Rail and Mobility at Siemens Canada
4 年Have you factored in all the required infrastructure upgrades to the grid and Extra land for substations, etc. ?
eNeR GEN Distributed Power Systems
4 年The one missing part in the long term analysis is simply “governments insatiable appetite for money”. The moment there appears to be a massive shift to electric..... the taxes will escalate at an exponential rate annually!! Then there will be “new” sources of revenue identified by the Gov. New “infrastructure” taxes to accommodate all the charging stations. Demand for power will eliminate “off Peak” periods and prices will soar because there will be a new “captive” market!! Just look at Ontario.... prices got to be so high people started using less electricity. Utilities found they had to raise “fixed” charges due to a decrease in revenues. Nope.... the gov will tax any benefits away once they have you where they want you!!!
Director Of Business Development at Playgon Interactive Inc.
4 年...and this is why I live in Vancouver and drive an EV.